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The Minnesota Commerce Department is warning Minnesota consumers not to borrow money from unlicensed lenders that advertise and offer short-term, payday or installment loans through the internet.

“When you need money, the offer of immediate cash might be very enticing, but these loans often include interest rates and fees that exceed what is allowed by state law,” said Commerce Commissioner Jessica Looman. “There’s a good chance you could end up paying more in interest and fees than the original amount you borrowed.”

In addition, consumers may have little or no recourse if they have a problem with an unlicensed online lender. Some are actually operating from overseas, or may claim sovereign immunity from state and federal consumer protection laws.

If a company is not licensed to make loans in Minnesota, these loans are illegal, void and unenforceable. While this means you are not legally required to repay the loan, it may not stop the lender from trying to collect from you anyway, including direct withdrawals from your bank account.

• Your personal financial information may be misused, including for identity theft.

• You may be subject to harassing or abusive debt collection tactics.

• If there is a problem with your loan, you may find it very difficult to track down the lender to get any assistance.

To help consumers protect themselves, the Minnesota Commerce Department offers these tips:

Verify that any lender is licensed in Minnesota to provide consumer small and short-term loans. Check the License Lookup tool on the Commerce Department website. The company should have a “Consumer Small Loan,” “Industrial Loan and Thrift” or “Regulated Lender” license. If the lender is not licensed, don’t do business with it.

Read the fine print. No matter who you borrow from, always get a statement that clearly details all the costs of the loan. Be sure you know how much you will owe, when payments are due and how they will be collected. Never sign or agree to anything you do not fully understand.

Borrow only as much as you are able to repay. When you take out a loan, make sure you know how you will repay it by the due date. Interest and fees add up fast when a loan has to be extended, or “rolled over.”

Consider alternatives. These short-term loans tend to be an extremely costly way to borrow money. If you are having trouble paying bills, contact your creditors to request extensions or negotiate repayment schedules. Try to get a loan from a local bank or credit union. You may want to talk to a family member or friend, or ask your employer for an advance on your paycheck.

Contact a local consumer credit counseling service. Assistance is available from nonprofit groups that, for no or low cost, can help you with budgeting, debt repayment and credit repair. To find a service near you, check with the National Foundation for Credit Counseling at www.nfcc.org.

Commerce is here to help. If you have a problem with an unlicensed online lender, you can file a complaint with the Commerce Department. A consumer complaint form is available on the Commerce website at www.mn.gov/commerce. You may also send an email to consumer.protection@state.mn.us or call either 651-539-1600 or 800-657-3602 .

—The Commerce Department is here if you have questions, or believe you have been the victim of a scam or fraud. Contact the Department’s Consumer Services Center at 651-539-1600. Complaints can also be sent by email to consumer.protection@state.mn.us or by mail to Minnesota Department of Commerce, 85 Seventh Pl. E., Suite 500, St. Paul, MN 55101.